A
currency-destroying hammer from the Lee Valley antique
tools collection

First
of all, I would like to thank you for displaying a bank hammer
on your "What Is It?" page (Volume
2, Issue 6). A group of us Trainmen collect and study American-Confederate
currency. Like pre-War notes, most Confederate money was cancelled
after being funded (i.e. traded in for any other type of fiscal
document, such as a bond, a stock, etc.) by using a bank hammer
to put cuts in the paper. It was then packaged, if not held
at the main office in Richmond, Virginia (the capital city of
the Confederate States of America), and shipped back to be recounted,
registered and burned, as your article states. They also used
pen knives, razors and various-sized hole punches for cut, punch
or hole-out cancelling at the larger depositories and the main
treasury. They could cancel large stacks of notes by hitting
them with one of the sharp-edged sledgehammers, such as you
display. These were called Bank Hammer Cancel Tools.

Most of what you write is correct, although your analogy regarding
the fibers in the paper isn't applicable during the American-Confederacy
period. Any fiber in the paper wasn't uniform, and, therefore,
cutting the threads would not in any way affect the ability
to reconstitute the paper. In fact, there were few who had the
ability to make paper, as evidenced during the Civil War (1861-1865)
by the lack of good quality paper suitable for banknotes.

The bank hammer was most used from the mid- to late-1840s and
through the American Civil War. It was also used in Canada,
where currency was handled in the same manner as in the United
States. After 1865 (or thereabouts), especially in the USA,
the only money that was printed was done so by the government.
The notes would be reused until worn out and then were replaced.
The old bills were either macerated or destroyed by burning.

After the War, bank hammers were primarily used for cancelling
checks. This practice went on well into the 20th century but
gave way to small multiple hole punch machines and various ink
stamps.

My group was discussing the cut cancellation of an 1862 Confederate
$100 bill. It was an interest-bearing note, and few of those
notes were ever cancelled, unlike all the other issues of 1861-1863.
Basically, when a note was funded (traded in), the life of the
note ended. It was recorded, cancelled in some manner and returned
for verification and destruction. After mid-1862, it became
impossible to cancel all the notes and even if they were cancelled,
it took too much time to ship them back to the capital and destroy
them. They were simply warehoused and later picked up as souvenirs
of the American Civil War. The 1862 $100 bills, as interest-bearing
documents, remained in commerce but were usually closely held
by banks and private institutions and, therefore, few were ever
cancelled.